THE PESO weakened against the greenback on Tuesday as inflation picked up in December.
The local unit closed at P48.065 a dollar yesterday, depreciating by 4.5 centavos from its P48.02 finish on Monday, data from the Bankers Association of the Philippines showed.
The peso opened Tuesday’s session weaker at P48.04 per dollar. Its worst showing was at P48.07 while its intraday best was seen at P48.025 against the greenback.
Dollars traded dropped to $586 million on Tuesday from the $873.75 million seen on Monday.
The faster December inflation print caused the peso to weaken, a trader said in an email.
Headline inflation rose 3.5% in December, quicker than the 3.3% in November and the 2.5% print a year earlier, the Philippine Statistics Authority (PSA) reported on Tuesday.
Data showing a continued decline in the country’s manufacturing output also contributed to the peso’s weakness on Tuesday, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.
Factory output gauged through the volume of production index shrank by 10.9% in November, a steeper decline than the -9.3% in October as well as the 7.6% slump a year ago, PSA data released separately on Tuesday showed. This is also the worst drop in four months or since the 13.6% contraction logged in July.
For today, the trader expects the peso to move within the P48 to P48.10 band while Mr. Ricafort gave a slimmer forecast range of P48.03 to P48.09 per dollar. — LWTN